The Bethlehem Arab Women's Union (BAWU) was founded in 1947 as a first aid center to care for refugees from Al-Nakba (Palestnian catastrophe at the creation of the state of Israel). Located in the historic old quarter just off the renowned Church of Nativity, the Union runs the embroidery gift shop and the ethnographic Bethlehem Museum.

The Union's embroidery project aims for the preservation and revival of Bethlehem heritage and for meeting the economic needs of women in the area. When it was established in 1972 to respond to worsening life conditions with the beginning of the Israeli occupation, the women began by collecting old dresses and studying the local embroidery tradition. Today, more than 150 women from the area’s villages and refugee camps receive embroidery work at the Union, including university students who pay for their education with their earnings.

According to Helen Elousi, who runs the embroidery project, the Christian and Muslim women in Bethlehem historically shared the common heritage of embroidery. Women identified themselves by their village of origin rather than the religion, by wearing an embroidered dress with the distinct patterns and colors of each village. The Union prides itself in preserving the Bethehem heritage in their meticulously embroidered cushion covers, bags, and pouches.